How do I fix an excess IRA contribution before the IRS penalizes me every year?
The IRS charges a 6% excise tax on excess IRA contributions for every year the excess stays in the account, so fix it promptly. If you catch it before your tax filing deadline (including extensions), you can withdraw the excess plus any earnings it generated and avoid the 6% tax; the earnings are taxable and may face the 10% penalty if you're under 59 and a half. After the deadline, you can withdraw the excess, apply it toward a future year's contribution, or absorb the 6% until corrected. Excess contributions often happen when income exceeds Roth limits or you contribute more than you earned. Your custodian can process a return of excess contribution; confirm details at irs.gov.
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